In the struggle that they maintain with the bosses for the negotiation of wages, since yesterday the unions have an additional argument. This is the OECD report that shows the magnitude of the fall in the purchasing power of the Spanish. Real wages, that is, discounting inflation, will fall by 4.4% this year, which is more than double the OECD average, which is slightly above 2%.
“This represents one of the strongest declines in real wages observed among the countries for which data is available, and a cut in the purchasing power of workers, as consumer prices in Spain continue to rise to record highs” , says the report, adding that those who lose the most purchasing power are those who receive the Interprofessional Minimum Wage (SMI).
Real wage growth has already fallen sharply in 2021 and will continue to do so this year. The truth is that the strength of the labor market generated labor shortages in the tourism, agriculture, construction and technology sectors, which helped some nominal wage growth in 2021, but it was not enough to protect the purchasing power.
This 4.4% drop in real wages in Spain forecast for this year is the second largest in the OECD, only behind Greece. Among the large economies, it is followed at a distance by Italy and the United Kingdom, with a drop of around 3%, and Germany, which limits the fall to 2.5%, all of them above the OECD average.
“Rising food and energy prices are taking a heavy toll, particularly on low-income households,” said OECD Secretary-General Mathias Cormann, referring to the group of countries included in the this organization. He also highlighted that, despite widespread labor shortages, real wage growth is not keeping pace with inflation, leading him to recommend governments adopt temporary support measures, properly targeted and conditional on the available resources.
If the data from the OECD underline the drop in the purchasing power of Spanish workers, the latest statistics on the agreements signed to date reinforce the same idea. The average salary increase agreed in collective agreements until August is 2.6%, which means being a long way from inflation that has already been above 10% for three consecutive months. Specifically, the advance data for August was 10.4%, which means quadrupling the increase in wages registered in collective agreements.
In total, there are 2,540 collective agreements registered until August, affecting 696,000 companies and 7.2 million workers. The largest wage increase was for industry, with 3.16%, followed by construction; while agriculture and services remained at around 2.3%. Few agreements are signed, due to the blockage of negotiations and the lack of a reference such as the Agreement for Employment and Collective Bargaining (AENC).